spain will test the bond market on thursday. top concerns today the g-7 worried about possible spanish bank runs. germany has suggested that it is open to pooling debt, but only in can change for who are centralized control over government intendi ingspending . and cutting rates today. policymakers citing a weaker outlook abroad. the decision was largely expected. >> we have other global market headlines. the imf managing director christine la guard saying the ecb has a bit of room to cut interest rates. she also denied the imf had opened aid talks. and a new business survey showing all the major economies

in various states of decline. may pmi indicating the economy shrank at the fastest pace. and the international energy agency warning that oil prices near $100 a barrel, yeah, that's still a threat to a slowing global economy. the iea saying the word is likely to consume less fuel than the agency had last forecast. >> starbucks is buying a san francisco bakery chain. the 100 million dollar cash deal the biggest move yet. howard schultz calls the dig a significant opportunity and catalyst. he says the artie son bakery

goods will attract more kus and bol ser both food and bench sales. >> they just bought that energy drink company. >> this is a french bakery. it's not like a paris baked bakery, but -- >> will they bring the products into star buck everywhere or will they expand the bakery chain? >> my understanding is both. do you know the drink company? >> yeah, but i don't remember the name. >> you're a dunkin man now. >> did you get a new one in town? >> no, they're all in the same place. should have switched years ago. analysts suggested the deal should put starbucks -- i want to work -- >> you want to hang with the 99%. >> hang with the working man. it will put star bucks in direct

competition with panera bread. key shareholders including kchl kr plan to sell up to 25 million shares. why are you holding a kleenex? >> because my nose is a little bit run any. >> what happened this year, do you know? it's been tenany. >> what happened this year, do you know? it's been t>> what happened this year, do you know? it's been ten days for me. >> he claims he's not sick. >> it's pollen. >> i'm worried there's something else going on. >> it's been the worst pollen season because of the early spring or whatever it was.

been awful. pollen from the early spring p. futures indicated down about 36 points. we lost 17 yesterday. we'll have jeff weiss on later. you have to wonder whether some important levels haven't been breached on the down side. there's what we're expecting today. oil finally able to mounts a little bit of a come back yesterday i think also reversed itself a little bit, 1.552. check out the currencies. 1 at the present time 1.24 on the euro. gold back up above $1600.

kelly evans is in london. each day -- i think you had dark on yesterday. today i noticed a white that you're wearing. >> for the queen. >> a jubilee type thing, i think. >> i didn't realize he cream is the queen's color for all the jubilee celebrations. i did not mean to rain on her parade so to speak. but now that we've reached summer, i have on get in the spirit. we've seen xetra dax the weaker performer. down almost about 1%. and this comes as we got reports on service sector activity across the euro block including germany softening last month. retail sales figures were weaker than expected. down 2.5% on the year. still seeing a better tone to the cac 40 out of paris and ibex 35 out of spain up about 0.3%.

swiss market up, too. why, you you ask some take a look at what's happening in bond yields 37 the broader message is no one wants to be too exposed ahead of this g-7 call. the bro no one wants to be too exposed ahead of this g-7 call. the bro no one wants to be too exposed ahead of this g-7 call. spain's 6.4% level, that's again off its highs. france at 2.297. and the ten year bund is actually -- it was a little bit higher this morning, it's the yield to 1.17%. 11:00 gm chlt is wh mchlm chlt . the concern is they come up with some sort of solution hand grand plan, that they will come out of the call with very little to

report. let me give and you quick check of what's going on with commodities and forex. seeing pressure across the board. crude oil down. brent still below $100 a barrel. gold, too, selling off. again, you can tell the market's trying to make sense of just what this next cross current is going to be. copper down a quarter of a percent, too. and finally the euro-dollar, i'll i go more the aussie for a momen moment -- 25 basis point rate cut from the royal bank of australia. qantas airlines meanwhile lowered its profit outlook at that time it cites weaker global demand. again back here to the euro-dollar, this was flirting with being up higher. thousand down half a percent. and usually when we see that independent could ha kind of action, we have weaker trades across the board.

maybe everyone is in good spirits because of the queen, but it's clear there is a question mark here as we hand off to you guys this morning. >> thank you, kelly. appreciate it very much. i'm a little worried that wearing white you told me is wrong on a day like today is like wearing white at a wedding if you're not the bride. is that wrong? >> you mean her wearing cream on the day of the queen's jubilee. >> what happened at the wedding? >> only the bride wears white at the wedding. >> no kidding. >> owe kccasionally other womenr white and it's always a scene. >> i know women who do not wear white at their wedding. >> so then hair guests could wear white. why wouldn't they wear white? >> i don't know.

four out of face facebook years have never bought a product or service as a result of advertising on the site. joel was polled all five times. >> i'm even further down the line. >> latest evidence the social network needs to do more. 34% of users surveyed were spending less time on the website than six months ago. i would probably fall into that camp, as well. >> there was a weird thing on one of the websites. they found some analyst at a firm i hadn't heard of, but his prediction, facebook is gone five to ten years. like yahoo!. it will still be around, 13,000 employees, but a tenth of the market cap that yahoo! had at the top that the same thing will happen.

one guy saying that. but interesting that we went from thinking a price at 38 up from range of 28 to 32, we've gone from that to just really hearing it's a fad and then we hear this, problems with mobile. >> there's a thing called path which i saw last night which is the new facebook for mobile. >> what is it? >> is it a facebook product? >> no, but it's mobile that works better. called path. >> and it's not facebook. >> it's not facebook. >> could they buy it? >> they could. sean parker will be announcing today that will be integrated with facebook. >> where did you see him? >> is this the kid thing? >> it's not.

>> they're so some kind of media blitz. >> hopefully with us later this week. >> somewhere else on the web i thought they were appearing somewhere. >> today they're announcing they're launching this thing midday today. speaking of facebook, take a look at hatheir shares. pauls 3%. now down officially 29% from the ipo price of $38. >> among the other stories that we're watching today, wisconsin holds that recall election today pits governor walker against the mayor of milwaukee. a rematch of the 2010 governor's race. the efforts have shattered state campaign spending records.

a watershed election because if walker were to prevail, people say the unions don't have the -- public unions don't have the m same shank gel hold thtranglehod on. >> a line in the sand about how we feel about things in the country. >> in trade has been above 90 for week. but barrett's own polling will-if i'm ever in an election, i'm going to do my own polls. but he says other polls have been 3%. >> the in trade, you have to put money down. >> so when people have to put money down, it's far more meaningful. >> then president obama will be

reelected because he's still at 63. you can see the jobs number right there. very right hand side was on bring. so went from about 57 to 53. a long way to go. >> oh, yeah. coming up, ben bernanke heads to capitol hill. will we get any hints of future moves by the central bank especially in light of that recent jobs data. the markets certainly hoping so. and later john paulson has reportedly purchased the famed hollow ranch from the saudi prince. >> i thought he bought it from prince. >> a real brieal prince. >> i should have known he changed his name. >> he got the rights back.

>> but this is a saudi prince. >> i'm looking this up on google maps right now. i'm going to zoom down and check it out. >> so there you saw him of itting in front of congress. he bought it along with another property in aspen for $49 million. the lavish ranch was one the most expensive estate ever listed in the country with a price tag in 2006 of $135 million. robert frank will join us with more including pictures. le anno] at scottrade, you won't just find us online, you'll also find us in person, with dedicated support teams at over 500 branches nationwide. so when you call or visit, you can ask for a name you know. because personal service starts with a real person. [ rodger ] at scottrade, seven dollar trades are just the start. our support teams are nearby, ready to help. it's no wonder so many investors are saying...

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here's u. futures. making headline, disney will stop accepting junk food ads on chlt v programs an and websites aimed at children. the move follows new york mayor michael bloomberg's announcement of a plan to ban sugary drinks larger than 16 ounces. this makes me absolutely bonkers. >> and yesterday they decriminalized pot in new york. >> which i have no issue with. >> you have no issue with that, but i'm saying they decriminalized pot and -- >> but criminalized sugary drinks. >> that's just counterintuitive.

if you're going to allow pot, you have to allow people to eat and drink whatever they want afterwards, right? you'll want butter fingers. >> just drinks over 16 ounceses. >> buy two. >> are you so right. i'll bet it was hostess who put brush on bloomberg. >> this is the guy the moderates always put up as i can handle a good like bloomberg, i can handle him. a and -- >> now changing the rule so is he can stay in power. >> tom friedman said we need a third person besides barack obama and romney and his idea is bloomberg. that's like endorsing mr. nanny say the. will is insane. >> yeah, the sugary drinks is crazy. >> but you should just outlaw

smoking completely if you're going to do it. you should make cigarettes illegal. >> can i just suggest that nobody, about you were going to the movies, should really be buying those big things that are five times the size of this. >> soda is why you're fat! >> thank you. >> there's got to be a limit, don't you think? >> no. what else do you want people to limit that you do? >> i wish that there was somebody who would limit some of these things that i do. >> and the other thing is -- >> i can tell you limit yourself in many ways. you just don't eat. >> you know why it's happening, because bloomberg feels like he's paying for the negative consequences of a person's bad habit. so if the government looks around and says i'm paying for

all these fat people, then i would come it, too. but if they were taking care of their own health problems -- >> that's why so many people get upset about health care reform because when everybody pays for everybody else, you, you're too fat, put down that cookie because you're costing me money. >> and you could be too thin. people could be following you in to the bathroom to see it if you're -- >> we'll have to start regulating the women's magazines. >> our weather guy does a bunch of hits throughout the day. he has us, then somebody else, and somebody else, and he has to sit and wait. eric fisher is sitting here listening to this drivel. >> and he does not drink 32 ounce drinks. >> new york but he gist wants to get through his set. s should bloomberg be doing this? forget the weather.

>> it's a little much. and caffeine is my only drug of choice. as long as i get a few cups of coffee, if he comes after coffee, then we'll have a riot. >> he could. >> and the weather has not really been creating a lot of good vibes either. mostly cloudy skies out here this morning. 52 in the city. and again the same stuck pattern, first couple shots of the morning looking at the clouds across much of the northeast. little breaks of sun here and there. a few showers working their way ashore. but the temperatures are still cool. you get to the beginning of june, start on think about summertime, nearly 20 degrees below average in boston. d.c., 72 doesn't scream summer, but we'll see improvements here. looks like the weekend things will pan out better in the northeast.

br new york, low clouds and showers. guys, back to you. >> we're still on the sugary drinks thing here, but thanks for the weather report. we'll get to more substantive issues. u.s. policymakers closely analyzing weaker that be expected jobs growth. on friday bernanke will be testifying before congress on the state of the economy. something we'll all be watching. john here to break it all down for us. >> i want to talk about these big drinks. here's my problem with it. i go to the movies with my kids and hair friends. get a big drink and little cupses and spread it around among everybody. this will make us worse off. and it's actually my way of giving everyone a small drink because then they have big drinks and really big drinks. >> so using it to cut down. >> i'm using to reduce. and this is the problem you

have. >> so there could be unintended consequences to government action? >> force my kids to drink all actually more so he came. >> you're in maryland. you must look up at some of this suv -- but you are close to the belt way. >> should you move down to washington. it's saner down there. >> that's scary. >> compared to new york. >> or compared to withis set. but read the tea leaves for us. given the jobs report on friday, what is bep goiis ben going to t thursday? >> they have a meeting june 19th and 20th. and before bernanke's speech on thursday, janet yellen will and you can in boston. so we'll get some indication of where they're going. but they're in a hard situation. important thing to look at is what happens to their forecasts. are there forecasts coming down

significantly. and it's not clear that they're coming down must have to warrant another all in move. but they have to be talking about it. the data looking worse. and they keep saying they want to see progress on bringing unemployment down. there's a lot of cross currents. and they have to make a judgment about whether progress has stalled. and they might not the have enough poinformation. >> so you think it may be another month before we know? >> it could take some itime.un . what the phone calls ben is making every die dray to draghi

others. >> they talk to each other and i think the fed and treasury are really frustrated. not so much with draghi. they like draghi because he's cut from the same mold. he's an m.i.t. economist just like bernanke. he sees the world the sale way. but it's a very hard political situation and they recognize -- they're frustrated especially geithner is looking there and geithner is one of these all in everything is takes guys. and he's saying you've been dithering for three years, you needed to get kapts in the banks. you didn't do it. i think they're really frustrated. but this actually relates to the fed meeting coming up. the ecb is meeting this week, too. if the ecb doesn't act and it's not clear that they're going to act, wouldn't it be strange for the ecb with interest rates at 1% and room to cut to not do something and then for the fed to turn around and take some unconventional measure later

this month when the problems are in europe. >> is that possible? >> anything's possible. >> very possible when you read all the commentary. >> with the way things are going, the ecb could kt-- the about ped woufed would act and before the wouldn't. >> thanks for being spectipersp. sugary drinks he definitely knows. but some fed stuff, too. coming up, a guest back by popular demand. ttd# 1-800-345-2550 ttd# 1-800-345-2550 let's talk about the typical financial consultation ttd# 1-800-345-2550 when companies try to sell you something off their menu ttd# 1-800-345-2550 instead of trying to understand what you really need. ttd# 1-800-345-2550 ttd# 1-800-345-2550 at charles schwab, we provide ttd# 1-800-345-2550 a full range of financial products, ttd# 1-800-345-2550 even if they're not ours. ttd# 1-800-345-2550 and we listen before making our recommendations,

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welcome back for to "squawk box." i'm joe kernen along with andrew ross sorkin and michelle caruso-cabrera. becky is on assignment. she'll be back tomorrow. making headline, finance chiefs holding emergency talks today. some problems in the -- >> and they'll talk. or they'll talk and talk. >> among the top concerns, the group said to be worried withy possible spanish bank run. >> i don't like saying bank run. makes me very nervous. >> when you see a line around a

bank, what are you supposed to do? get in line. >> i have angst. it really bothers me. >> atms are outside. >> if you see a line at the atm, get if line. >> stop, you're making me very tense. >> germany has suggested it's open to pooling debt, but only in cexchange for more control. >> you need to handle all control to germany and everything will be fine. >> if you're going to have the same currency and all these different economies, you need someone saying you're doing this right or wrong or -- pot that complicated. australia sprl bank is cutting interest rates today. policymakers citing a weaker outlook abroad and only modest domestic growth. and that decision largely expected, as well. >> let's check markets. the futures are suggesting a slightly negative open here in the united states. dow would open lower by 35, s&p

500 by nearly 7. declines roughly a quarter percent to half a percent. a half a percent these days looks slight. energy markets are lower. crude $83.84 per barrel. ten year note has been incredible to watch. 1.517%. you missed your refi window. the dollar mixed again the -- >> you can go back some? >> 1.15%. >> i'll have to make a phone call after the show. >> you're getting nervous. >> i want to get it done. i want to lock the rate in right now. >> i think i'll buy because money is so cheap. >> you should. did you read larry summer's piece yesterday? >> yes, borrow, borrow. >> might as well do it now.

>> and do we want to show gold? >> we must. >> the gold bugs will have a heart attack. fiver by 5%. 1619 per ounce. >> our next guest believes that the bears advantage has now lessened. jeff weiss. jeff, i don't remember you saying the bulls had ever lost hair advantage. was there a time between the last time you were on and now when the bears did have the advantage? >> yes, it was actually when we failed -- the chart we showed just over 1400. anything over 1400 is rough because at the time our indicators didn't support a breakout above what we thought and still think is the major area between where we are now and the all-time highs in the

s&p. it failed on two fronts. >> and you said if it does that, ten there's problems. so it did do that and now we need to decide -- there it is. so failed. all the financial scuttlebutt after friday was that we were below the 200 day moving average. once that happens, you would think that was negative. why are you saying it puts the bears in a less powerful position? >> great point. very often looking he moving averages, even technically speaking, not necessarily the thing to do. very often you have to break a moving average before you can rally. i think the advantage has lessened even if we test on a

weekly basis is that if you take a look at down side buying as a percentage of total volume and you put it on a moving average, the 13 day moving average, that number has gone down while the market's gone down. so they've spent some of their power more so than you would think. >> so down side volume has been drying up. >> declining. >> so people that wanted to sell have already acted on their intentions. >> down side momentum peeked. hello, michelle. >> nice to see you here. >> and best to your mom. s >> thank you. she appreciates the shout out. >> i think basically that momentum has peaked. now we have to look for a price bottom and i think slightly lower in the 1240, 1260 area.

>> still will hurt on the way down. another 38 points. >> no one said the down side doesn't hurt in this business if you're on the wrong side, but i do have another chart showing that 1240 to 1260 area. and you can see a trend line drawn off the 2009 weekly closing low and you can see two horizontal trend lines going across that all converge in the area of 1250. >> so 1250 the support level. >> give or take 1% on a weekly basis. and volume is starting to -- >> i think you you guys get your rulers out and about it were to fall more, you would just move it down more. >> after 37 years, do you think -- >> you could fit a little lower. >> the nice thing about being a technician is it's all based on what the market does. and if we break 120 and we do it

on a weekly close and the indicators aren't good, maybe you get out of a little more, a little more. the nice hinge about technical, it's not an all or nothing props. but i'm going to stick by the area of 1240 to 1260. >> have we shown all the charts that you brought today? >> we have, although i might add if one wants to put a chart up while we're speak has gone there are three utilities i watch and they don't get the credit they deserve. however it was the utility averages that have not broken their april lows and if you remember, last year in december the utility averages, the trio that i look at, all made new recovery highs and the market's first quarter was nothing to sneeze at on the northerly end. >> they don't get credit forer ? >> for being a good lead indicator. i don't think transports have been a wonderful indicator.

>> 1.5% ten year notes, utilities all pretty good yielders. >> and aren't they very sensitive to interest rates? we always used to call them the interest sensitive utilities. >> but even at other teams when you wouldn't think that those rules applied, utilities have done a nice job. but i believe the utilities average wasn't created until the 1920s which is why the down theory seems to get the most attention. like the current theater which looks at the dow versus -- >> you're wearing blue glasses. >> i am. high wi . >> how many different pairs do you have? >> total a lot, but the ones that actually fit now -- >> how about red? >> my wife wears red glasses.

and i wear blue. >> interesting. probably means nothing. thank you. thank you for coming in. >> thank you for having me as always. comments or yeses about about anything you see here, e-mail us squawk@cnbc.com. coming up, the ism nonmanufacturing index, take a look at the markets. and then later, scott walker facing a recall vote today. one state's issue with national implications. donald trump will weigh in on that when he weighs us to discuss here on trump tuesday at 7:30 a.m.

welcome back. let's take a look at u.s. equity futures. dow would be off about 32, s&p also off almost 6 1/2 and the nasdaq off a little over 11 points. making headlines this morning, the iea saying a surge in unconventional supplies will see the u.s. overtake russia as world's biggest natural gas producer. that comes by 2017, but the country will still need imports to feed a strong appetite. >> coming up, before you hit the office water cooler today, you'll want to see our next segment. the off beat headlines that have us squawking including john paulson purchasing the famed hollow ranch from a saudi prince. what it looks like and the price next.

tomorrow two "squawk box" masters of the market. our guest host will be stephen roach, former nonexecutive chairman of who are began stanley asia and we'll talk tech with co-founder of venture partners. don't miss "squawk box" starting tomorrow at 6:00 a.m. eastern. ♪ there'll be the usual presentations on research. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom.

and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪

john paulson spending some of his fortunes on a palace in the mountains. robert frank joining us. is he a big skier? does he need to be? >> apparently he and his family have been going there for 25 years. he bought a house there for $25 million just two yearsing a go. p. >> fixer upper. >> exactly. but he's trading up. this is a 56,000 square foot house, bigger than the white house. this house had been for sale at one point for $135 million. the most expensive home in america. >> and he bought it for $49 million. >> what a deal. >> plus he got will this plus another property the called bear ranch. so in total, he's two properties were once valued at over 150, he bought it for 49. >> and where is bear ranch? >> just off this other property. so it's an adjacent property. >> so the saudi prince was under

water, did they allow a short sale? >> what's interesting is this house went off the market in like 2008 or 2009. and it kind of disappeared. and now it's back. i don't know whether he just wanted to get rid of it, but his taxes on this property which was assessed at over $80 million, we all talk about the assessments being out of whack, it was assessed over $80 million. his taxes last year were over $200,000. so the carrying costs on these thin things -- >> did he get a mortgage? >> my guess is he probably paid all cash. when you get to this level, these are all cash -- >> not a super jumbo? >> no. but what's interesting is this house is 56,000 square feet, but he'll down scale the house, not quite sure how that's going to work. but it does need a lot of work. >> it does not compute. his taxes should be even higher.

$200,000 on 49 million? >> aspen must have a very low tax rate. >> it is very low tax rate. >> it is a very low tax rate. >> it's about 130 acres. the wealthy of looking for safe stores of value right now. this a good buy. it's a large piece of property in aspen. it's not going to crash in value. >> it went from $149 to $49 million. that seems like a crash to me. >> does he have his own ski lift? >> no. >> if it never slows in aspen

again, if there's a climate change. there are summer activities there. >> there was a time a few years ago when there were three homes in america priced at $100 million and more and what's happened to those homes has been a disaster. one of the moments is trump's home in florida. that's caught in a big divorce. the other was in yellowstone ranch and that yellowstone went bankrupt. and this house was listed at 135, 140. don't price your less at more than $100 million, bad things will happen. >> that room we just showed almost looked like a great room and a yellowstone ranch or something. you could almost make this a resort. i guess not, 50,000? >> apparently when the prince traveled, he had this entourage of dozens of people, some of them stayed there. he had high security in this place. he had his own gas station, his own water filtration system. >> at minimum it's a good b & b.

>> yeah. >> with the other entourage you were talking about. >> how many did you say, 50? >> somewhere between 20 and 50. >> here's a guy who made his big fortune from shorting the housing market, looking at value in the housing market and here he is again. >> we're going to move to another topic. you dropped your paper. we have three people married here and one who was not but you have views on this. who sleeps better at night? this is men versus women and more importantly if you are a couple you sleep better together. so actually sleeping in the bed with another person makes you sleep -- do you think that's really true? >> it probably feeds into your primordial brain and makes you feel comfort. >> twin beds?

>> no. we have a king size bed and i get a very nice sleep. however, over the weekend we were up with some friends sleeping in what was almost like a full size bed -- >> with the friends? >> thank you, thank you. >> i don't know. >> and it was tough. it was a long night rolling around. >> really? >> it was hard to sleep. but that's now sounding even worse. >> it is. >> we'll have my wife call in later to provide some full details. >> i don't -- you know, there have been in that section of the journal, i see it on the front page, i don't like it when i read it in the morning. there have been so many stupid banal -- >> banal. >> i like banal. i don't want to sound pretentious. i've seen stuff if you're going to cheat, where you go to cheat or web sites -- >> you know what has been the most popular story on the web site on the wall street journal tore the last two weeks?

>> what? >> what couples are afraid to talk about with their spouses, bad sex, not enough sex, they're afraid to bring it up. >> so you don't have to worry about any of this anymore. you're a world traveler and you're in italy all the time. >> and athens. >> exactly. >> my story, front page of the "ft," i love they highlighted the shanghai composite fell 69.89 point, the anniversary of the tiananmen square protest. >> we're talking about sex and sleep and you're talking about the shanghai composite. >> i saw something that struck me about tiananmen but a father i guess now is a dissident because he wants some type of recourse or just to admit that his son was killed at tiananmen and you can't google it -- >> you're not allowed to discuss it in country. >> and that is just so bad, that

you lose a child and the government doesn't even recognize it was something that ever even occurred over there. when stephen roach comes in tomorrow, i always talk to him about that. don't they eventually have to change a little bit? isn't that going to be a problem at some point. >> they acknowledge it when you read some of the publications that come out of china, they talk about greater discussions among the people, about policy decisions. >> this whole thing that happened with the wife and the british guy they killed and the son was driving ferraris around the uk. >> tinker taylor bo xilais.

>> coming up, your room at hotel squawk is ready. gaylord, we're going to check in and don't miss that and much more. mcallen, texas. in here, heavy rental equipment in the middle of nowhere, is always headed somewhere. to give it a sense of direction, at&t created a mobile asset solution to protect and track everything. so every piece of equipment knows where it is,

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zeroing in on europe. finance minister calling an emergency conference. what it could mean for your money. >> expanding the brand. marriott takes in another big player. what this could do to boost opportunities here and abroad.

>> all eyes on wisconsin. the intense recall election with far reaching implications beyond the badger state. donald trump's here to weigh in as the expected hour of "squawk box" starts right now. good morning. welcome to "squawk box" on cnbc. i'm michelle caruso-cabrera along with joe kernen and andrew ross sorkin. here are your morning headlines. upbeat economic news out of china this morning. services industry expanded at the fastest pace in 19 months during may. a monthly survey by market points to new business growth as the primary reason behind the increase. >> attorney matthew kluger has been sentenced to 19 years in jail for his role in an insider trading case. he and two others were accused

of insider trading in over 11 corporate deals. >> incentives for companies to invest in new gas supplies. >> if you look at the cost of developing incremental supplies of the natural gas supplies in the u.s., it's difficult to justify investment. if terms of supporting long-term investment in new and ongoing supplies, it will be difficult at this price. >> tillerson says export regulations causes difficulties for distribution. >> andrew? >> thanks so much. the g-7 finance minister and central bankers talking today. roger altman has an important

op-ed in today's "washington post." roger served as the deputy treasury secretary during the clinton administration. also with us alec young, the global equity strategist at s&p capital iq. roger, let's start with the op-ed. you talk about three things that need to happen now. walk us through them. >> andrew, first of all, i think the moment of truth for the eurozone is rapidly approaching and you can see that in both the structure of treasury yields, which reflect such profound fear and you can see it in the structure of european yields, which are reaching the levels always associated with unsustainability. now, what i tried to point out was that for the short term europe lacks -- the eurozone lacks the rescue tools that it needs to bring itself through to

the type of fiscal banking and economic policy integration, which is ultimately needed. it does not have a large enough nor a deployable sovereign rescue fund at this very moment. it does not have a central system for insures deposits in eurozone banks to back up the national systems and it does not have a mechanism for infusing equity into shaking banks if that's necessary, as it may well be. those are three of the rescue tools that got the united states through the events of 2008 and 2009 and european doesn't have any of them ready to use today. the view in europe seems to be, and i spent a lot of time over the past week with european leaders, that if the crisis reached the boiling point, we'll all get in a large room with heads of state and finance minister and we'll figure it out. that's not going to work with these tools not available. >> alec, let's get to that

issue. let's handicap it. if you put everything in a room, does everybody walk out with an answer? >> no, i think roger's absolutely right. just the fact that the europeans have let it get to the brink like this i think is turning off investors. we're two years into this crisis. in the past we have seen the sort of last-minute kick the can down the road time buying solution. so i think some investors are hoping for that but one of the reasons that global markets can't get off their backs is that, you know, there's really no evidence yet that anything is imminent. hope springs eternal but what we're telling clients is rather than try to catch the falling knife, wait till you see really constructi constructive, fundamental headlines that show there may be light at the end of the tunnel and get a lasting rally. be prepared to miss the first 1% off the bottom -- >> is it 1% off the bottom that you're going to miss or is it 4% off the bottom you're going to miss? >> i think if they can put

something credible in place like the ltro last december and we get a four-month rally, looking back no one will care if they got in on tuesday or on wednesday. the morning thing is -- importa thing is is there fundamental news to buy into. >> what's the down side? >> the down side could be another 10% to 15% if we keep going the way we're going. we could be looking at another lehman-like situation. >> they don't have those tools. after watching them for two years it feels like that's by design. the leaders say if you put those tools in place, it enables all the political leaders not to do all the things they need to do. you go back to berlusconi and their cage matches and berlusconi didn't do the right thing and it feels like this has all been done on purpose to try to ultimately change the very core of the way europe is

functioning. >> michelle, they need both an agenda for the very short term, and i mean the next two weeks, three weeks, four weeks and so forth at the same time that they put forward, as i put it in the piece, a 6 to 12 month detailed plan on full integration and economic policy. the absence of these tools means there's big downsizing. the first rule of investing is to keep what you have. our ten-year wouldn't be trading at 10.51 if that wasn't the case. they're really flirting with that collapse. any debate about how it disincentivises politicians i don't think is correct. >> do you think -- i think -- you tell me if you agree or not,

you're right, the way they look at the markets, i don't think they acknowledge the markets. i don't think many of the european leads are believe they need to be beholden to the markets. they constantly say things like we won't be be holden to the markets and they only act when they're forced to. >> one of the things that's not clear to me is whether the type of expertise that we have in our fed and in our treasury, with i was so priceless during late 2008 and 2009, very specific market expertise is present on a wide basis in europe. >> no, it's not. >> i'm skeptical that it is. >> i don't think it is at all, you're absolutely right. >> that hurts them because effectively the politicians talk to each other and they're not talking at least enough to people who are really in the markets and understand what the markets are telling them. >> you don't think that angela

merkel really understands the depth of the problem or that she's in a box and feels politically she can't do anything? >> well, i can't speak for mrs. merkel's grasp of markets. i really don't have any judgment whatsoever on that. but of course what she's been doing is trying to do as little as possible as late as possible on reform because the idea of germany put being its balance sheet behind the eurozone is unpopular among her people. but the moment of truth, as i said at the of beginning, is now arriving. it is going to require germany effectively to put its balance sheet up. >> as a former treasury man, is there a role for the tou.s. to play in all of this? >> it's an interesting question as to whether a more vocal

presence at this point would be constructive or in effect make things more difficult. >> they insult him every time, roger. they call him timmy. >> there's a debate going on in washington right now about that question. >> they insult him. tim geithner shows up and they refer to him as "tim" and they're dismissive. >> first of all, everybody calls tim tim. >> at a press conference with leading secretaries and central bankers? >> i wouldn't put a lot of emphasis on that. i think tim geithner is held in great respect in europe. i've seen direct evidence of that i might add. and i think actually that a more vocal -- a more vocal approach for the united states today probably would be sensible. because we're getting right now -- we're playing right on

the edge of the cliff here. >> alec, real quick, when you look at -- when you're looking at numbers in the morning, we actually had this conversation with alan greenspan last week, what is the one or two numbers in terms of europe right now that you're looking at in terms of how you think about the entire day? >> we look at the spread over the german ten-year that we're seeing in spain, italy, that's a big one. watching the cds. but i'm really watching the headlines. i want to see signs of a compromise between germany and spain. that's what the markets want to see and they're getting increasingly turned off no progress is being made. >> alec, thank you. roger altman, thank you both for your perspective this morning. >> if you have comments or questions, you can tweet us at@squawkcnbc. up next, the attacks on sugary

snacks continue. >> you get the music? >> yeah. i just saw a joke albert -- >> he'd only be allowed to eat skinny people. [ female announcer ] it's time for the annual shareholders meeting.

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futures would suggest a negative open, not by much, though. those levels don't look so bad considering what we've been through lately. walt disney will stop accepting some junk food ads on tv programs, radio show and web sites. the disney move follows new york mayor michael bloomberg's move to ban sugary drinks larger than 16 ounces. last year craft, coca-cola and kellogg agreed to nutrition criteria to children. i think there's a word missing there. >> joining us to talk summer

travel, the economy and of course the deal, marriott international ceo arnie sorenson and gaylord entertainment colin reed joins us this morning. you're ceo now. >> rumor has it, yes. >> it's not sorenson international yet. it's still marriott international. >> it is and it will be for a time to come. >> i always want to give you a chance to make your true feelings to mr. marriott known and you always do that. you're very deferential. marriott is already none as really great in conventions and meetings and hosting business type events. is that what this is about, more of that type stuff or just a general brand with gaylord? >> gaylord has only four owe tells but they're four great hotels and four hotels with

great presence. we've long respected their ability to service often the same customers and association in big group space. i think combining them with marriott, a new brand gaylord, we can brink tremendous efficiencies to them, to their hotels. we think we'll get efficiency on the hotels we already have in our system and with that we'll be that much stronger in our ability to service those customers. >> colin, if i've got the deal right, you're basically selling the brand, the gaylord brand and those four hotels, the rights to manage those four hotels. but there will be a lot of gaylord left. but what happens? it goes into an rit? can you explain that? >> that's correct. we've been struggling with our stock price has not been tracking with the performance of our company. the idea is to split the operating side out, put it in the hands of the marriott organization, which, as you said, is tremendous in the group side and retain the rest of our businesses, including the grand

ol' on pri in a real estate investment trust. we're going to eliminate a lot of cost in our business. we announced the deal last thursday and our stock is up 12%, 13% in a three-day period of time in an awful market. we're pretty delighted with the investor rear action to this idea. >> colin, you don't sound like you're from tennessee. do you like country music and the grand ol' opry? >> the last time i was on this show i think i got hell from michelle because of this crazy accent of mine. what i told her then and i'll tell you now is i'm actually from the south, just the south of england. >> do you know how brad paisley and faith hill are? >> i think i do. one is a member of the opry and

one isn't. >> on big box, big conferences, i thought we were moving towards smaller, smaller, smaller. am i wrong? what's going on in that space? >> i think there's always a place for these big group meetings. what we're seeing is a fairly normal economic cyclical recove recovery. the big group business is the slow toaest to come back after recession. we are seeing it come back. it is a business that falls slower when the recessions hit and it comes back a little bit slower when economic recovery occurs. >> talk about slow, what is going on in washington, d.c.? i saw that's like your worst market right now. >> washington is our worst market in the united states. obviously the politicians are -- >> i thought everyone were going to fly to d.c. so they could go hat in hand and lobby. >> lobbyists have to move there permanently because there's so much government to lobby.

>> i think the politicians are all out raising money. i understand mid town was closed for the president to come through. there's an election year so there's a lot of attention outside of washington. the second is you've got many government agencies who are either experiencing some pressure on their budgets or they're worried about cuts that are coming. and those two things combined are causing some significant pressure on government business, which is a big part of what washington is about. >> yeah, yeah. >> you said that like ironically, right? >> surprise, surprise. >> business in quotations marks because it's almost anathema to business. >> you can expand mid market, can you go to europe, asia. what is all this global flux? where are the opportunities for marriott do you think? >> well, when we look at this

year and the anxiety, i listened to the interview you before we came on, the anxiety about europe and the fiscal cliff after the election are somewhat different than what we were thinking about last year but they're basically the same issues. last year they had a profound impact on the market and no impact on our business. you look through every quarter of 2011 we posted good numbers on the board. right now sit hearing in 2012 we're still performing well. even in europe we're up 3% to 4% in terms of same-store sales. only time will tell if the same set of anxieties has a business on our business performance. hopefully it won't. >> in europe you haven't seen much, in whatever metrics you use? >> rev-par, which is same-store sales. it's about half the growth rate in the united states so it not as strong but i think what we're seeing is that while the local economies may be weak, the

weakness in the euro is causing more people to come and the expansion in global travelers is mushrooming. chinese, indians, brazilians, there are millions more people with resources to travel and they want to see paris and london just the waive they want to see new york and san francisco. >> arne, you're a director at walmart. i'm curious, when did you first learn about the problems or these esh use taking place in mexico? what's your view about all of it? >> well, this is obviously something that is getting enormous attention by the walmart board and walmart management team. i've been on that board for four years as of the last meeting, which occurred last friday. we're looking at it with tremendous resources. mike duke and rob walton gave speeches friday that said integrity is one of the core values of walmart, it is nonnegotiable and we will do

right by it. >> when did they tell you about it? >> it's something we learned about just in the course of the last number of quarters. >> if it goes all the way to the top when you say "do right by," what do you think is going to happen if. >> we've got to do the work in order to get to the right set of questions and the right answers. it would be way too early to answer that kind of question. >> the last number of quarters, so in the time frame of when they would have been approached by the "new york times" so not before that? >> it's just the last quarter. >> how did you have react? >> it's still very early. the company has reacted with force to say we're going to use the resources we need to use to get behind this and figure out what happened. >> what did you think personally? >> right now my view is we've got to find out what the facts are. >> colin, do you still -- just back to what you're going to try to do, are you going to try to effect some type of growth plan for gaylord?

would it involve expansion or do you have view it as a mature asset at this point? >> it will will be two forms of growth, growth within our indigenous assets. these assets can generate a lot more cash flow, the one, we own today. and now that we will not be brand con straened, we will be able to go and buy physical assets across the country and put them into the real estate investment trust. that's one of the other benefits of doing what we're doing. >> so is it -- you going to changes name or the symbol of -- >> maybe, maybe. we'll talk about that downstream. >> you excited about the jubilee? i haven't asked you about that. there's a lot going on down there. >> what do you think? >> i think so. >> it's very good. she's a good lady and led the country well. >> do you have one of those commemorative plates they all seem to have over there? >> i'm sure i'll get one.

>> i'll bet they sell them at walmart. >> that kate is something, too. i figure i'll bring up kate. she looks nice. >> she's great. i love her. >> thanks for coming on squawk. >> coming up, why people are turning to public transport more than ever, including me when i'm not with jeeves and donald trump coming up when we return. is always headed somewhere. to give it a sense of direction, at&t created a mobile asset solution to protect and track everything. so every piece of equipment knows where it is, how it's doing or where it goes next. ♪ this is the bell on the cat. [ male announcer ] it's a network of possibilities -- helping you do what you do... even better. ♪

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"squawk box" is packed today. coming up donald trump on the european recall vote. later how to invest in the midst of an uncertain environment and the stocks you'll need to watch at the opening bell. don't move. n't move. have ongois and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's another reason more investors are saying...

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♪ is that the best in history? welcome back to "squawk box." among the stories we're following, g-7 finance minister are holding an emergency call on how to deal with the european debt crisis amid growing concerns about spain and the upcoming greek election. wynn resports is confident its resort will be a success. it will cost $4 billion but will

generate a good return. >> and starr becomes will add la boulange breads to its stores. >> thanks, michelle. we're joined on the squawk newsline by a man who know as thing or two about selling real estate, donald trump. donald, i know you saw tiger over the weekend. that was not more than a couple weeks ago when he said he's definitely going to come back. what an incredible display we saw on sunday. i missed that. it was good to see, wasn't it, that chip shot, what was it at 16? >> it was great to see and tiger's actually a great guy.

people don't know tiger. he's a great guy, nice guy and a very talented one and he certainly came back. that was one of the great shots. >> and i think you misunderstood our reporter robert frank earlier. he said after -- you sold it before the crisis. >> i sold it just before -- >> he said there was a divorce afterwards so that some bad things happened to -- >> but he wasn't talking about my divorce. >> no, no. >> it made it sound like he was talking about trump's divorce. i'm trying to figure out what divorce was he talking about. >> that was the people that bought it afterwards. >> which i do have the all-time record. i bought that house of the bankruptcy, i bought it in palm beach, it's a wonderful place, great house. i bought it for 40 and i sold it for 100 and then lehman crashed. i didn't exactly know what he was talking about. he had me in there with a group of people that didn't do well with housing and that particular deal was pretty good. >> you sold it to a russian,

right? >> i sold it to a russian. he's fighting like hell with his wife to try and figure out who gets the house. so i don't know. i wish them a lot of luck. but palm beach is an amazing place. another good guy is john paulson. i just bought doral from john paulson. he owned the debt and i think he made a great deal on buying the debt. he's a great guy also. we bought doral country club. i'm here now trying to find out how i'm going to spend lots of millions of dollars of making this the best place in the country. it's 800 acres right smack in the middle of miami. >> right across from the federal reserve of miami. >> you're starting with an absolutely fantastic golf course. >> absolutely. >> i figure could you do a -- you know, these guys it was made -- i don't know whether it use to be the blue monster but these guys handle monsters like anything. you need to lengthen anything?

>> gill, who is doing the olympic course in brazil, he was just named over all other architects, i hired him just prior to him getting that assignment. we're going to make it the blue monster again. it's still a very hard course but the word monster is a little different. they're hitting the ball 100 yards further than they used to. right after the next cadillac tournament, a great group of people, by the way, cadillac. amazing job cadillac has done. they also sponsor the tournament. right after the cadillac tournament we close the blue monster for a short period of time and essentially we're going to build something that's going to be amazing. >> what about the hotel? i haven't stayed there. does it need updating? >> it needs work. marriott ran it, they did a nice job and we're going to upgrade it. we're going to make it into a five star resort. >> donald, one recommendation. i used to work at univision.

i could see right into the property and all the private areas. they need bigger fences or something. >> we'll have to give our guests a little better privacy if that's the case. >> what's going to happen in wisconsin today? does it matter? i hear from certain conservatives that this is a huge deal but now i'm hearing from liberals that the koch brothers bought this election so it doesn't really matter what happens. >> that's because the liberals think they're going to lose. whenever you think you're going to lose on something, it never matters. scott walker, who i was with recently is over in the office and he has really worked hard. he wins an election -- this whole concept of recall is very unfair. bill clinton was saying it the other day, it's really a very tricky concept. you win an election, you then do

what you want to do and they say we want a recall. i think he's going to win and he seems to be up in the polls. i've never seen anything with such hatred and such energy as this one. this one's a beauty. >> if you take on public unions in the past, donald, you rue the day. and that would be why this might be a water shed event that someone can actually do it and not end up in the dust bin of history. because it's tough. they do not -- they don't like if you mess around with them. >> well, they don't. but if you look at what's happened, he has done an amazing job in wisconsin. they have a tremendous surplus now, which they didn't have. the property taxes are way, way down. he's done an amazing job. you look at the result and that's probably why he's up substantially in the polls. we'll see what happens. it's a big day. but this is a very, very water shed day for that particular -- and i think actually for the president. now, the president said he was going to be back. he never went back to campaign.

>> no, and there were all kinds of republican stars, all these governors, you know, up and comers are all in wisconsin for walker but none of the big name democrats. i guess schwartz went there but obama won handily in washington. he doesn't want to get on either side of this debate because some independents helped him there and they might not be anti-scott walker. >> donald last week on the program we talked about the birther issue, it became another media fire storm. we actually talked to governor romney about your views and his views on your views about that issue and i wanted you to take a listen to this for a quick second and react. >> i disagree with it. i think there's no question but the president was born in the united states of america. i don't go around telling all my supporters what they should think or what they should say but he knows what i believe about this. i believe the real issues in this campaign and the issues

that america cares about are not issues of the president's personality or matters of that nature. >> donald, so should we end this? >> no, he is entitled to his view and i think that's great. look, i made the keynote speech in north carolina this weekend. the biggest applause was when the issue of birth place was brought up. it was standing -- the people went crazy. there are a lot of people that look at the numbers and look at the facts that disagree and they have the right to disagree and that's what this country's all about. president obama wrote himself in his book that he -- as you know that was going to be published and the publisher put it out, a statement that he was born in kenya. >> the publisher has taken the fall for that. >> the publisher was fully committed to it and all of a sudden out of nowhere announced he made a mistake. >> he said it was a misprint. >> donald, you have the candidate who is running against the president saying you know what, it's a nonissue.

do you just crack it up and say, okay, it's done? >> i think honestly i think mitt should take that stand. i think it's great because he wants to talk about jobs. so do i, by the way. andrew, you have to understand. this is my feeling. i've seen a lot of evidence. i happen to have that feeling. by the way, many other people have that feeling but i never want to talk about it. you bring it up -- we were talking about houses in palm beach and scott walker and all of a sudden this thing gets brought up. every time i'm interviewed they bring it up and then they say oh, then it becomes national heldlin headlines. if you look at the numbers and look at the facts -- >> this is just giving you a line if you want to use. say i'm not going to argue about whether he's a natural born citizen anymore, i just want to know if he's an nbs, a natural born socialist. why don't you try that line.

>> no matter what interview i do i'm talking about jobs, i'm talking about the economy, talking about europe, talking about the eurozone, somebody will always say, oh, could we talk about the birth issues because from a press standpoint, they love that issue. >> want something much more important? you are two blocks away from my favorite cube and diner, delicious. >> maybe i'll have to go there for dinner. >> what about the jobs number out on friday, donald? >> it was terrible, a terrible number, shocking to a lot of people. also the revisions from the last few months were probably even more so. it's interesting when you reach vi -- revise you don't get the kind of press from the current. they put out the numbers and revise and don't talk about the revised numbers. the numbers were terrible. >> thank you for talking to us on the line on trump tuesday. we'll talk to you again soon and have for at doral.

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turning back now to the markets. joining us is the founder and managing partner with sky book capital and is the author of "little book of hedge funds." what are you doing here with all this uncertainty generated by europe and that terrible jobs number last week? >> you're in a high correlation market where everything is moving in the same direction. soap you have to go into noncorrelated asset assets. >> what are they? there's only like one, right? >> you can buy stuff at 30 cents, 40 cents on the dollar and expect to lose 20 cents of principle. you could buy something at 40, have it be redeemed at 80 and make a ton of money on that. people will not buy that because

it's been out of favor and out of vogue. that's something that sky bridge has been doing through mortgage backed security hedge funds. treasuries are going in the opposite direction because that's a move to safety. there are subprime debt, mortgage-backed securities, whole loans, events driven arbitrage. that's basically the only spots that you can make money right now. >> any basic stock ideas or equity investors for the novice viewer, the average person? i know you're involved deeply in hedge funds and have a lot of sophisticated strategies but -- >> i think stocks are cheap on a fundamental basis. if you look at a 25-year metric of stocks on cash flow, pe, cash on the balance sheet, there's trillions of dollars sitting around. nobody wants to move because of

the fear of great uncertainty. until you can get the public policy pronouncements correct, the tax policy pronouncements correct, the costs of health care, you'll see most of that cash sitting on the sidelines. >> is there anybody out there killing it right now? you have your money placed with a lot of different fund managers. is there a name cleaning up right now? >> the pine river guys on mortgage backed securities are up 20%. do i know anybody up 50%, 60%? i don't. 10%, 15% by the end of the year -- >> in this kind of market when your investors say what's your threshold, what could reasonably be expected? >> the treasury is at 160, 170. you're looking at three, four, seven times the treasury. we're in a low-growth environment. so if we can get a high single-digit return or a low

double-digit net return, that's a home run for investors right now in an environment like this. >> why should people read your book? >> sounds boring though, right? >> what's in your book? >> why should people read the book? >> yeah. >> the book talks about the hedge fund industry and it talks about if you're in a union, you probably have money in a hedge fund somewhere in terms of your allocation fund. the media focusses on the guy that made a billion dollars and stole a billion dollars. those create great readership and viewership but the middle of the industry, professional side of the industry, there a lot of good people doing a really good job. if you're looking for a reasonable rate of return with less volatility, i think the industry is fairly safe. that's the point of the book. >> okay.

good to see you, anthony. >> congratulations. >> see you at the book party. >> this is your second. >> when is your second book coming out? >> i haven't come up with a brilliant idea like you have. it's hard. up. >> when is your column? >> it's in today's paper. >> i meant when is your next paper? >> it will be in the paper next week on this same day, joe. today was awesome. it was on dimon, jamie dimon. checking the futures, reuters finds -- futures are indicated down. it's gotten a little bit worse. awful may, bad start to this month already. friday was the real problem. reuters finds four out of five facebook users have never bought a product or service as a result of advertising or comments on the site.

the findings may be an indication that the social network needs to do more to turn its 900 million customers into advertising dollars. the poll also found 34% of users surveyed were spending less time on the web site than they were sex months ago. >> are you on facebook? >> only to check out my kids. >> ah, girl friends, come on. >> did you buy into this this evening? >> no, i didn't buy into it. >> would you touch it? >> i wouldn't because it not the thing we do. i have to say i got it wrong, though. i thought it would trade up. i bought into the hype incorrectly. it's not face planting either. this is a social media stock that's here to stay but if you guys remember in 1996 aol had a walled guaarden around it and everybody thought aol is going to be the leader in the internet

forever. we all know that didn't happen. too much uncertainty in these stocks. >> a supporter of open programming and facebook supporter joins us. and more on the fallout from friday's dismal jobs report. we'll talk with doug holtz. eakin and howard ward. ♪ under blue moon i saw you

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take a look at some stocks to watch this morning. we'll start with dollar general. it has beat estimates by 3 cents, posting 63 cents a share. revenue is also above. but the retailers announced a secondary offering, 25 million common shares. that's why the stock is indicated lower but it's been on a unrun. fedex has increased quarterly dividend by a penny to 14 cents a share. and banker for cbs are said to be gauging interest in the company's outdoor advertising business, which is still a pretty good business.

>> not a bad business. remember when everyone thought outdoor was a bad business. >> you guys are an outdoor right now. >> absolutely. >> you know what gets me about outdoor advertising now is the ones that change. i'm always -- a lot of guys they have a guy who has done something awful, a bank robbery, and i'm about 400 feet away. and i want to check the guy out in case i see him and it always switches before i get there. >> does it make you a distracted driver? >> yeah. >> that should be outlawed. bloomberg should outlaw that. >> in fact, they advertise big soft drinks sometimes. >> what are we going to do about that? >> i don't know. >> i looked at your mug on the highway the other day. >> i'm way over on the left. there's too many of us there. you got to be a big star. you know the people that get their own big -- >> mine's up next month. >> cbs is hoping to draw bids as high as $6 billion.

and reports on bidding for amylin is intensifying. that's a good story. >> that's not a bad story. i wonder what's going to happen to apple stock and google stock today. this whole enough shift on map software. on your iphone they have the google map, they're going to switch over to their own mapping software. they say the iphone accounts for most or a big portion of google's advertising revenue in terms of the map, right? you take that map off and put apple's on, what does that do to apple stock and more importantly to google stock because controlling the mapping software apparently is a huge deal. we will keep our eyes on that. >> that's a big story. >> coming up, uncertainty in the

market markets, economic weakness and the looming financial cliff. we'll talk to doug holtz-eakin and howard ward, cio of gamco. >> if you're just tuning in, you're two hours too late. >> for the short term the eurozone lacks the rescue tools that it needs to bridge itself through to the type of fiscal banking and economic policy integration which is ultimately needed. >> what we're telling clients is rather than trying to catch the falling knife, wait till you see some really constructive fundamental headlines that show that there may be light at the end of of the tunnel here and that we may be able to therefore get a lasting rally. >> right now sit hearing in 2012 we're still performing well.

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a potential debt compromise in europe. continued fall out from the may job report. we'll talk global economy with douglas holtz-eakin. >> and attempting to replace governor scott walker. >> and the financial times once called him bill gates' worst nightmare. he'll join us to talk about his early investment in facebook. the third hour of "squawk box" starts right now. welcome back to "squawk box" here on cnbc, first in business world wide. i'm joe kernen along with andrew ross sorkin and michelle caruso-cabrera. becky is on assignment.

checki checking u.s. equity futures this hour, we are indicated up -- what is this? no, it's down. it's the fair value. we're down about a quarter of a percent so far today. >> well, a quarter percent, we've got some more bad news for facebook, hoping they don't go down another quarter percent but a reuters poll finding four out of five facebook users have never bought a product as a result of advertisers on the site. the latest evidence the social network needs to do more to turn its 900 million customers into advertising dollars. the poll found user were spending less time on the web site than six months ago. shares hitting a new closing low yesterday, the stock fell 3% to

26.90. we'll talk to an early facebook investor today at 8:30 a.m. eastern. >> and rex tillerson spoke on cnbc exclusively this morning. >> we need to take a long-term view and test our products against a pretty broad range of pricing because these investments have to remain robust through some pretty large swings in the price cycle, which has been essentially the history of our industry. >> tillerson also says excess government regulation present as danger to future output expansion. michelle? >> spain's treasury minister

says high borrowing is effectively out of the bond mark market. the euro this morning at 1.2416. g-7 finance chiefs holding emergency eurozone talks today. the group is said to be worried about a possible span, bank run. germany has suggested it is open to pooling debt but only in, change for more centralized control over government spending in european countries. european equities at this hour are mixed. germany is lower by 3/4 of a percent but france is higher by 3/4 of a percent. italy is slightly higher, spain is flat. >> joining us is douglas holtz-eakin, president of the american action forum and howard

ward, chief investment officer at gamco. welcome, doug and howard. this is like felix and oscar. you ready to talk -- what if i ask you about price to earnings multiples and stocks that you like. what are you going to tell me, douglas? >> not too much, joe. >> what should we do with facebook? sell it? buy it? >> i'm skeptical on phafacebook have about equal faith in facebook and greece. >> wow. facebook works. >> that number friday, let me paint what we hear. i know that you see it. housing hasn't really come back yet. it was an awful obviously financial crisis. and i'm hearing both, that the other thing is that republicans have stonewalled everything the president's tried to do and the american jobs act, they didn't pass that so we shouldn't be

surprised we're still at 8.2%. that's what we're hearing from axelrod and others. what really is causing us to grow -- gdp to grow below plan and the jobs market to be so weak? >> the only way to get real up side growth is to get strong improvements in the housing market, which feeds into a lot of industrial sectors. and autos. housing is probably beyond policy repair. autos have looked a little better but i'm worried there isn't enough income growth in the consumer sector. in those circumstances, joe, the best thing we could do would be to have policy that supported long-trend growth. we haven't this those. so there's not a great reason for up side hope right now. >> what will next month's report and the month after that with

europe as a backdrop and china as a backdrop, do you expect to us get back up to 200,000 any time soon? >> no. >> what about 150,000? >> we've seen a conscious attempt for policy makers to make 150 the new normal so markets don't get rattled when we hit it but i think 150 would be optimistic, quite frankly. we don't seem o to have the output growth necessary to generate that kind of employment. the data has been mixed at best. in my view less than optimistic. i'm concerned about the pace of the near term expansion, i really am. >> howard, off camera we were talking about one of our market masters, bob dahl is retiring, which opens up someone in the ds. but when i said that you said you were envious. who wants to stick around and

maneuver through these waters. >> it's been torturous. not only coping with the financial problems since 2008 but the ongoing situation in europe. two years ago in may of 2010 i was on the set with ken rogoff talking about europe. could you go back being pull that clip, play it today and it's the same conversation. we're just not making progress. and i am worried that the markets are losing patience with the situation in europe. i this i they're getting very close to the cliff, playing it too dicey and i think the risk of a bank run of some substantial is growing by the day. i think time is very much of the essence. i don't think merkel perhaps appreciates that. >> what would that do here? >> it wouldn't be good. >> really? are our banks exposed? are you talking about a systemic financial event or just slow growth that would seep over here? >> i think you would have an air

pocket in growth. >> are you talking about a lehman-like event in? are you still worried about something like that happening? >> i i hope not. i hope the the financialence constitution are probably not as risk as they were a couple of years ago. >> but we have the fiscal cliff here we're worried about. is there any reason to be long? are you buying? >> i don't think the u.s. economy is going to have a recession in 2012. >> what about 2013? >> i think that's on the table. i don't think that was perhaps on the table a couple of months ago but i think -- i think -- >> lauch has been on the money. >> 2013, a recession on the table. >> i think the recent data has slowed enough. it's beyond the point where we're talking about the warm weather in february and march pulled growth forward. i think it was more than that. and i think we are auto

professional dubs and sales are doing pretty well. state finances have improved. so things are not dire but the rate of member tum, we're going to be talking about that. >> do you think corporate managers are not doing long-term things because of uncertainty, tax policy, obama care, fiscal cliffs. it's. >> so that is happening. it's not just a hang overfrom 2008? >> will the election solve neg? >> wool see. we'll see what happens. it's very difficult to make significant capitalin vestments with the regulatory and tax uncertainty that businesses face. so, yes, that does result in less economic activity at the imaginin than we would have otherwise. >> so you're trying to run

a-month-old through this, right? >> i am. >> so we're not going to read about you tomorrow, just checking it, right? >> no, no, no, . >> what would you buy today? would you buy some pfizer? >> this is a good conversation because the market has had a full 10% correction. it was overbought, it's no longer overbought, 12 or 13 times earnings. >> howard, i've gotten more out of doug holtz-eakin, who is an economist. he told me to get the hell out of facebook. you're the one that's supposed to be doing this thing. doug, should i buy anything? how about pfizer today in. >> i think buy clear high tech stocks in drugs and technology. >> there you go. >> i want you to take advantage

of the correction. >> you do? >> yes. >> i want you to buy some stocks that have had a percentage double digits pullback. if you don't own google or qualcomm buy, buy them. big correction in energy, buy eog, schlumberger. >> now we're talking. >> go buy starbucks, buy nike. >> industrial names. >> emerson, eaton, ge. >> you have to pound the table. >> i'm getting excited talking about these names now. take advantage of the direction. don't be a dear in the headlights and make it work to your advantage. that's what i'm going to do maybe again today in a small increment. >> i'd let you pick some more

stocks but are you with the romney campaign now? are you advising them in any way at all? >> no, i'm not. i learned something in 2008, which is i'm too old for this. >> as a casual observer, how do you think the election is getti getting on now? let's say romney is down to 41 and so. >> the most important thing is to recognize it's not just jobs. the key issues go beyond that in the key battleground states and the swing voters that are by and large have jobs, the unemployment rate is quite low, 5% to 6%. for them the issue is the high prices in gas and food and no relief in their health care

premiums. to talk broadly about the economy is the key to mr. brownly. he doesn't want to run out a tough spot. he's been attacking the scat ji. >> who knows how long but it still resumés to some.. >> the republican brand in the crowd works right now. i saw you writing furiously as howard was giving all those names. that's all right. that's a little benefit to coming on here. you get the help. >> tree tips. >> start writing those tickets right now. >> you know your named is howard ward. >> i just noticed that.

>> voters headed to the polls today in wisconsin's gubernatorial recall election. it is a raes energizing republicans in a state that is keep to president obama's reelection campaign. john harwood joins us next. >> still ahead, the facebook fallout. we'll ask an investor about his early stake in the giant. keep watching cnbc, the first in business world wide.

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. welcome back to "squawk box." the futures better now. making headlines, goldman sachs reportedly laid off 15 employees last week, they were managing directors, on the higher end of the pay scale. >> mds, they were doctors. >> muppet doctors. >> voters attempt to replace wisconsin governor scott walker. john harwood joins us from madison, wisconsin with the latest. john?

>> we're finding when you combine a strong partisan agenda with a political environment, the results are combustible. president obama learned that in 2010 after pushing health care. scott walker is finding out today. he's pushed aggressively to curb the union power. >> it's not personal. we just have very different views of the world. i think the best way to move forward is to get government out of the way and put power back in the hands of the people. my opponent believes more government is the answer. >> that opponent is tom barrett of milwaukee, a mainstream democrat who lost to scott walker two years ago. he been badly outspent but insists he's making head way at the end. >> our tracking poll on thursday and fry showed there's a one vote difference. not one percentage point, one

vote. the energy we feel on the ground, the number of people we have throughout the entire state leads us to be very, very optimistic. >> but look at these al rajs for real clear politics which shows scott walker with a 7-point lead going into election day. that why he's the favorite in this race and it's why president obama has kept his distance. this is a state president obama needs to win. everybody is going to be looking at this as a sign whether or not republicans are making a rebound in the industrial midwest as they've indicated in some other parts of the country. >> thanks, john. that is the key and the context here because in terms of what happens here, it could give romney a jolt and impact the elections and therefore the markets. i don't know if you saw this war of word on twitter this morning, john the president tweeted, says it's lek day in wisconsin today and i'm standing by tom barrett. then the rnc chairman comes back

and said bold tweet from the president who wouldn't campaign with him or step foot in wisconsin. >> our again, this is a state that democrats have a won it six times in a row. president obama won it by 12 minutes to 2008. you got to consider him the favorite. because of some of the income and economic trends that doug holds aiken was talking about, republicans believe their prospects are better in places like clearly indiana and also ohio and maybe even washington. this state is likely to be close and we'll see after the results today, could be extremely close whether or not republicans can sustain the momentum. >> people looking at it as a big

metaphor for everything that's happening. the first state to have public unions i think was wisconsin in 1959. it weird that's where some of the collective bargaining rates. it's so symmetrical. >> poetic. >> we talked about the shanghai indirection down -- that's the code word for tiananmen. it's weird that the public union started here. there a lot of problems in a lot of states, john, because of overpromises in state budgets. and it's very weird. is it squaring the circle? >> it's a test of the power of the entitlement state, it a test of the power of public employee unions. we've seen governments all across the country taking them on. walker has been unusual live --

we'll see whether the public unions can push that back. it not clear that they can. >> also a flash point for big super mark money and coke brothers and buying elections and everything else, john. >> joe, i'm still trying to figure out one other thing. >> go ahead. >> should i buy fiezer? >> i don't recommend -- >> i didn't get any clear guidance on that. >> let me tell you something. i'm not recommending any pfizer products. >> he doesn't need them. >> i have a friend who has a little bit of a problem. he's a good guy and i feel for him. 4% yielder. i don't know. i'm not saying buy pfizer but some of these big, huge blue chip companies with these pretty good yields, i don't know if you're not sure what to do. are you implying i was endorsing pfizer, john? >> no, no.

it was just kind of funny hearing you trying to get people to tell you whether you should buy it. >> i know there's a lot of guys around here who use some of their products, faber, for example. lipitor, lipitor! get your behind out of the gutter. what were you thinking? see you later. coming up, more on today's top stories. facebook closing at a new local and an early facebook investor the financial times once called bill gates' worst nightmare. we'll be right back. [ beeping ] in here, data knows what to do. because the network finds it and tailors it across all the right points, automating all the right actions, to bring all the right results. [ whirring and beeping ] it's the at&t network -- doing more with data to help business do more for customers. ♪

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welcome back to "squawk box" on this tuesday morning. a well-none name to squawk viewers is retiring. blackrock chief equity strategist bob dahl will be departing at the end of the month. he said he wants to focus on his family, faith and philanthropic interests. he'll serve as an adviser to the firm until the end of the year. >> yahoo! has put out a call for the new ceo. the job is said to be ross levinson's to lose. >> let's head to chicago. steve liesman is on the set. we've talked about how stocks

will open flat to negative, rick. >> when it comes to treasuries, we're up a couple of basis points, and 154, 1 55. we closed in the low 150s, up a couple on the 30-year bond. once given as potential hope springs eternal in europe, we'll continue to see this. one of the guests this morning on the show referred that europe will continue to slip away and does believe there's going to be change. let's concentrate on something more important. we continue to see virtually zero interest rate on two-year shots. and if you look at what is going on in the australian dollar as many banks are trying to fend off the influx of capital or outflow of europe, we see how they're trying to deal with some of those issues.

>> steve, it's been one of those mornings already. one news source saying spain can go directly to the bailout fund to the banks and then a german comes out and goes oh, no. this is going to go on like this for months. >> and it is time for a change. i'm pounding the table. it's time for the united states to step up and lead in europe. >> you sound like roger altman. >> i had this idea before roger altman. i was talking to g-7 officials yesterday hearing the same old rhetoric we heard for a long time. it's not working, this idea of praising europe and jntly prodding. it is time to lay down the law. since at least world war i europe has not been able to solve its problem by its own. nobody trusts germany. germany is not big enough. germany's gdp is the same as california, texas and north carolina. could you turn to those three

states and say solve the problems of the u.s.? no, you could not. german's population equal to california, texas and new york. could you say by yourselves solve it and plus -- maybe people do distrust california, new york and texas. it's time to step up, take a big pot of imf money and put it in the second loss position behind europe and say you guys create x weeks will give you y and solve this problem. >> the u.s. should give them money? the european union has enough money! >> michelle, are you happy now? is this working for you? it ain't working for me, it's not working for markets and it's not working for anybody. >> steve, 1.5% on the ten-year. we're down over -- >> i'm getting a mortgage. i love it. >> this is not the way civilized people should be living.

>> you want us to go enlighten europe. who is going to enlighten us and fill our brain with ideas to go take to europe? we're emulating their path more than creating a way to prevent it. >> their problems, rick, are they're incapable of acting collectively. >> they can't act collectively. that's why this is going on forever, steve. >> by the way, nice tie. is that a purple tie? purple with the white, good tie. now that i have you disarmed -- >> disarmed i am. now i even have a speech impediment. >> first of all, the obama -- the geithner tact, i don't think it's working. and i don't think the g-20 leadership is working. they need to get these countries, pony up money ahead of the june meetings in mexico. there needs to be a big carrot

for europe to step up with its own money in the first loss position to recap the banks. >> go to a meeting in europe and bring a case of whiskey. >> offer them the whiskey if they offer the wine. >> you're talking about rational numbers. >> it's crazy! >> you know what europe's problem is? it's very simple. they can't believe they're latin america in the 80s. >> they're not, though. >> they pretty much are. let me finish one second. all of them still want to be re-elected. what they have to learn from latin america in the 80s is none of them are surviving, it's done, it's over. so do the right thing now. integrate more while you still can. more and more elections are going to come -- >> how long is integration going to take at this point, michelle? >> if you acknowledge you're going to lose no matter what, you go forward. >> first of all, they're not latin america because they're a lot richer than latin maerk.

you so that's problem number one. problem number two is that they have no way of coming together and acting collectively because no trusts germany -- >> if you're a politician there and you're going to lose no matter what, you do the right thing and you come together. from government. from germany! >> the only way the center holds ever in any union is if there's money in the mid approximately there ain't no money in the middle so the fringes are flying off to the side. >> where's all the money? >> the imf has to come up with the money in a second loss position. you put together x plus three -- >> why should the u.s. give rich italians and richin germans money? >> because the alternative isn't working. do you think it's working? we continue to consolidate at a lower level. things fall apart. they come together with some plan to put things back together

and it's always at a lower level. the trajectory is downward. >> yes, absolutely. >> we need to put a stop to it. i'm just offering an idea. >> i'm pred ooe to put the chips where they may. the europe -- europe can't do it without the u.s. and the u.s. needs to lead rhetorically. and it can lead financially. that's what has to be done through the imf. >> let's borrow another ten cents of every dollar we spend and transfer it to europe. good idea! >> when the governments act correctly and collectively -- >> they never act correctly. that's why we're here! >> how much did it cost you -- >> that's cost us a boat load of money! a boat load of money! they gambled with my tax dollars for leverage and they got lucky therks got the money back. >> they saved you, rick.

>> it's about risk. >> okay, okay. >> at this point, what do you mean it's not working for you? you think we're in that dire straits here at this point? this country and it's because of europe? >> i don't think it's only because of europe. >> we got our own problems and -- >> i'm just saying where we are right now and where we're headed. >> i don't feel we just open our checkbook. >> i'm not saying open our checkbook. in general it has never cost the imf a penny when they put their money up. >> but you agree it's always happened -- >> let's go to europe with one million copies of "atlas shrug," that's how you'll help europe. >> coming up, a fallout from facebook's flawed ipo. we'll talk to a man at the "financial times" once called bill gates' worst nightmare,

shervin pishevar will join us. we asked total strangers to watch it for us. thank you so much, i appreciate it, i'll be right back. they didn't take a dime. how much in fees does your bank take to watch your money ? if your bank takes more money than a stranger, you need an ally. ally bank. no nonsense. just people sense.

welcome back to "squawk box." only down two and a half points now. that has improved as the morning has moved forward. >> much better.

3, 3, 3. >> thomas lee buys party goods for 2.3 billion. and party city management will have significant minority stakes in the company after the deal. it looks like i'm being really moved by this story but i've never really sneezed right in the middle of reading. that was very close. >> that was very close? >> that was very close. >> this is pollen. >> i thought emoting about party city. >> it's been such a great company. >> i thought you were making reference to a geographical location. >> i should say there are some people crying over this next story. facebook closing at a new low yesterday, down 29% from the ipo price. joining with his outlook, shervin pishevar, he invested in

facebook notice secondary market. some of his angel investments include one of my favorite, uber. he does so many others. and he sold a couple -- he sold one to google and what's the other one he sold? milo.com to ebay? >> to ebay. >> i got all that right sort of? >> those are right. menlo investors -- >> let's talk about facebook. you got into this in the secondary market. you think this is a long-term buy. my question is are you buying more of it now that it's public and where it stands? >> i think -- yeah, absolutely. i think that the -- it's important to study history. you look at the history of amazon after its ipo, it was down quite a bit. anyone that bought in at that point is quite happy. fred wilson wrote a great response to paul graham's recent

memo and he's talking about that even at this 10 x revenue and 25 x ebidta, this is a company that is, for me, a transformational company, it's a platform company, you have almost a billion people that are logging in, 50% of them every day, growing incredibly well on mobile. so i'm long on facebook because i'm long on a connected hugean i -- humanity. >> what price did you get into this in the secondary market? >> i think like 31 and i'm not selling. >> are you buying more now? >> i'm going to pick up more. it's at 26 now. i'll probably pick up more around that range. >> there's a reuters story we've been talking about how four in five people say when they've used the service, they've never clicked ton one of these ads

that has led to a purchase and a good percentage of them are using the service less than they used to. what do you make of those numbers? >> facebook is going to be a really powerful, and it is already, advertising platform. the other thing to realize about facebook is you have to treat it almost like the web itself. there are so many avenues for this company to invest in. payments is going to be another area i'm interested in, social commerce. we're investors in fab.com, for example, has incredible opportunities in terms of you're looking in the growth of pinterest, growth of fab. people are buying based on what their friends are buying. facebook has an incredible opportunity. is there anything out there you think will come patriot peete with facebook? i've played with path, it's not as expansive as facebook is. there are people trying to do

similar things. >> path i'm a huge fan of and i use it every day. i don't think path is trying to position itself as a direct competitor with facebook but things can change overtime. i'm interested in the creativity of entrepreneurs. just like dziuk was a pressure naun at harvard when he thought of this idea of facebook. there's going to be a kid somewhere in the world who is going to come out with the next big thing and it's probably not going to be in this sure social networking space. it's probably going to be in the area of companies we're investing in. most of the designer kbglasses e going for $500 and they're selling for $95. companies like hotel tonight, companies like uber. these companies are growing incredibly fast and they're based on merging a lot of these

platforms together, social, mobile, combining those together and coming up with new things. >> how important ultimately is facebook going to be to creating that ecosystem in shawn is announcing a new program called "air time" and that uses the sort of phase platform in many ways. >> in the growth that's happening, air time is integrated tightly with facebook. it's going to leverage that to grow. same thing for social cam. it grew because it connected with the watch api inside of -- >> but here's the question that i have. >> that's leading to totally new ways. >> all of these things being layered on top of facebook. the revenue is going to air time when and if they sell ads on that product is going to get the money. spodify, integrated very closely

with facebook. ultimately the question is how does facebook both online and perhaps more importantly on mobile, of find a true revenue model? >> can ask you social cam and the tightly integrated spodify use case, people are using it and going and seeing these actions inside of facebook. and facebook has advertising around those apps. so the better they do, the better the apps do, the better facebook does. the other connection is with facebook credits, they can use the facebook question p credits and facebook gets a third of that revenue. so the more these can be tightly integrated in a cross-platform aconnecting -- way, connecting to mobile, the app inside of ios

is connected to these apps. >> ver vshervin, we have to run just tell me one thing that's going to be the next thing we should watch out for. >> i think machine zone is a social -- it's called machine zone. it has 10% of the top grossing apps on irs. hotel tonight in a similar space of excess capacity. >> we will keep an eye on both of those. >> thanks for being with us this morning. >> my pleasure. >> coming up, we'll head down to the new york stock exchange next. >> ready or not, the stock of the day is coming up. you're watching "squawk box" on cnbc, first in business world wide.

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welcome back to "squawk box." the futures right now down about 14 points or so. let's get down to the new york

stock exchange and the trilogy -- not really a trilogy, but there are three. and the -- not really musk musketeers. >> actually, there's one more way over on the other end. >> actually a camera. >> can you pan over just a little bit there? yeah. a little more. oh, there you go. >> there he is. faber. faber is an award-winner. >> i referenced you earlier as a joke. >> and that would be the first time you've ever done that? >> no, we were talking about pfizer and i said i have a friend who uses some of their products. and i mentioned you. and i said but it's lipitor. >> actually, now it's toravistatin, i believe. it's generic. >> and you blamed who on that? >> i cut out beef. i cut out steak.

once a month is all i have it. it's just too high risk. it's a cholesterol thing. >> it's also really bad for you. both of my daughters are vegetarians. i think it's right. >> is there a generic version for viagra, joe? >> i don't know. and i can't really see that because of all of these blue spots. >> your brand-loyal, right? >> yeah. what else is going on. >> we are waiting for the headlines, as you are, from this emergency call among the g7. i see the japanese minister is just now speaking. we'll see if we get any clarity on this master plan, this grand plan, if there's going to be one. >> all we care about is the secret deal. as if there really is some sort of behind-the-scenes, closed door caucus going on where merkel and the spaniards will hug each other and the market flies up so you've got to cover your shorts.

>> do you want to hear the big headline out of this call? the g7 agreed to cooperate on issues such as spain and greece. >> hey, you guys, i was half listening. i -- no, i was listening. but his idea was because we don't like the way we feel because of europe that they really need a big bazooka. and that we need to pony up big time because it's in our best interest to do it. do you think that's going to become -- cramer, do you think we need to get involved here in a big way? >> i think that it wouldn't be so strange is bernanke said listen -- >> where is the imf? >> jeremy with the imf. keep going back to carl's interview with romney. does he know where italy is? >> that's a little -- that's cold. i think he's done some business overseas before, sure.

>> well, i know david has because he went to milan with minnie drexley. >> they still make some stuff over there. >> but he sends the fabric to china. >> yes, he does. >> all right. i don't know. so he wants a collectivist globe, not just a collectivist country at this point. >> is he in on this secret deal? >> you know who today's birthday is? john manard cane's. >> coming up, the stock of the day. is it in your portfolio? ♪ on the road ♪ and we know that it goes on and on ♪ [ female announcer ] you're the boss of your life. in charge of making memories and keeping promises. ask your financial professional how lincoln financial can help you take charge of your future. ♪

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stock of the day is starbucks. the company buying a san francisco bakery chain called? >> it's the owner of bay bread, the $800 million is starbucks biggest move yet. analysts suggest the deal should put the chain in more direct competition with pinera bread. i noticed you did the french thing. so you'll do any latin language. you can get any